Renewable energy, CO2 emissions and value added: Empirical evidence from countries with different income levels

This study explores the relationship between CO2 emissions, economic growth, renewable energy consumption, industrial value added and service value added during the period 1990-2015. Annual data of 102(1) countries classified by income levels: low-income, lower middle-income, upper middle-income and high-income countries. Using the Generalized Method of Moments system and Granger causality test, the results revealed that except for the lower-middle income countries, renewable energy consumption leads to decrease CO2 emissions in all the countries. The estimation revealed that renewable energy consumption affects negatively (respectively positively) service and industrial values added for higher income and low-middle income countries (respectively upper-middle income countries). For low-income countries, renewable energy consumption contributes to the increase (respectively decrease) of industrial value added (respectively service value added). With a small proportion, renewable energy consumption has a positive impact on both industrial and service values added for the global panel. (C) 2019 Elsevier B.V. All rights reserved.